BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Isadore Hall, III
Chair
2015 - 2016 Regular
Bill No: SB 1475 Hearing Date: 4/12/2016
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|Author: |Committee on Governmental Organization |
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|Version: |3/7/2016 Introduced |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Arthur Terzakis |
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SUBJECT: State warrants: records
DIGEST: This bill makes minor changes to an existing
provision of law pertaining to canceled warrants for the purpose
of modernizing the system by which the State Treasurer's Office
(STO) and the State Controllers's Office (SCO) manage records of
all canceled warrants.
ANALYSIS:
Existing law:
1)Requires the SCO and the STO to each keep a register of all
canceled warrants showing the number, date, and amount of each
warrant, the fund out of which it was payable and the date of
cancellation. (Government Code Section 17071)
2)Provides that whenever a warrant issued by the SCO is unpaid
for one year after it becomes payable, sufficient unapplied
moneys having been available for the payment of the warrant,
and for the payment of all senior obligations, the SCO shall
cancel it. (Government Code Section 17070)
This bill:
Modifies the existing procedure by which the SCO and STO must
maintain a register of all canceled warrants to instead require
the SCO and the STO to each keep a record of all canceled
SB 1475 (Committee on Governmental Organization) Page 2 of ?
warrants within the Financial Information System for California
(FI$Cal).
Background
Purpose of SB 1475. As noted above, existing law requires the
establishment of separate registers of all canceled warrants by
the (STO) and the (SCO). According to the STO and the SCO this
requirement was necessary following the establishment of the
Centralized Treasury in 1949 to ensure that the STO did not pay
banks for warrants that had been canceled by the SCO.
Today, as a result of technological advancements, the STO
Centralized Treasury and Securities Management Division (CTSMD)
Item Processing Section (IPS) receives from the SCO on a daily
basis electronic files that list all outstanding warrants, and,
accordingly, any warrant presented by any bank that is not
listed on that file will not be paid, will be rejected and
returned to the presenting bank. Thus, there is no need to keep
a register of canceled warrants as defined in Government Code
Section 17070. The only warrants that the IPS processes and
approves for payment are those presented for payment by banks
that match the warrants appearing on the outstanding file
provided by the SCO.
STO and SCO staff point out that fulfilling the requirements of
Government Code Section 17071 as currently written would require
the development of a new IT system and the expenditure of funds
and resources on a functionality that would eventually become
obsolete as it will be built into the FI$Cal.
This bill will require the STO and the SCO to each keep a record
of all cancelled warrants within FI$Cal.
What is the Financial Information System for California
(FI$Cal)?
FI$Cal is a business transformation project for state government
processes in the areas of budgeting, accounting, procurement and
cash management. The objective of the project is to develop a
comprehensive statewide budget system to prepare, enact, and
administer the state's annual financial plan (budget) and to
provide critical information required to make budget decisions
and manage state resources. FI$Cal is a partnership between
the agencies responsible for the state's financial management:
SB 1475 (Committee on Governmental Organization) Page 3 of ?
the Department of Finance (DOF), the SCO, the STO, and the
Department of General Services (DGS), collectively known as the
"partner agencies."
Prior Legislation
SB 797 (Committee on Governmental Organization, Chapter 249,
Statutes of 2015) added prime-rated commercial paper, issued by
a federally- or state-chartered bank or a state-licensed branch
of a foreign bank that is approved by the Pooled Money
Investment Board, to the list of eligible securities for
investment of funds in the Pooled Money Investment Account. The
bill also made clarifying amendments and deleted obsolete
language relating to various bond acts.
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: No
SUPPORT:
State Treasurer's Office
OPPOSITION:
None received